Consumers’ Demand Are Growing But Little Improvement Seen In Broadband Connectivity

Broadband Connectivity

The world is on the cusp of the 4th industrial revolution, which encompasses cyber-physical systems, cutting-edge research in artificial intelligence and biotechnology, robotics, etc. It has the potential to cause massive disruption in our day-to-day lives and has the capability to empower individuals and communities, as it creates new opportunities for economic, social and personal development. India needs to capitalise on the opportunity presented in the digital revolution by ensuring rapid, scalable and reliable broadband network deployment. India today is amongst the largest telecom markets in the world with over a billion subscribers and more than 80% mobile penetration. The growth in mobile telephony in the last two decades has been, in the true sense, game changing. We have achieved significant progress in the wireless voice narrow band space and we are now at the threshold of a digital revolution with focus on delivering quality broadband to the masses and leveraging its significant potential for economic growth and social inclusion.

While the economic impact of broadband connectivity is immense and has been proven time and again, it also has the potential of having a cascading effect on other sectors as well. From education and health to disaster management; from financial inclusion to e-commerce; from public safety to entertainment; broadband connectivity has the power to make services and applications available to all to transform our country into a digitally empowered society and knowledge economy. Our Prime Minister’s vision of Digital India with high speed broadband as basic infrastructure for every citizen; provision of government to citizen services online; and empowerment of citizens to give them a say in governance lays out a roadmap for us. We need to work with focus and determination to make this vision a reality.

Importance of broadband

Globally, we are on the cusp of the 4th industrial revolution, which encompasses areas such as cyber-physical systems, cutting-edge research in artificial intelligence and biotechnology, robotics etc. These technologies have the potential to bring about a positive and yet disruptive change to our day-to-day lives. They have the capability to empower individuals and communities by creating new opportunities for economic, social and personal development.

We, as a nation, have come a long way from the initial post-independence era where the focus was on securing our economy (Agriculture sector accounting for 55% of the GDP in 1951) and building competencies to our emergence as a strong knowledge-based economy. It is important that we now capitalize on the opportunity presented in the 4th Industrial revolution to continue our growth on the socio-economic front.

Broadband has far reaching implications and has been leveraged to achieve national objectives by multiple countries. Countries such as the US, the UK, China, South Korea, etc. have used fulfillment of national broadband plans to achieve one or more of their national objectives. For India, it is expected to not only contribute to the socio-economic development but also enable the Government’s ambitious plans and strengthen our position as a knowledge-based economy.

Rise in broadband penetration to 60% in India is expected to translate into a 5-6% increase in the country’s GDP; to the tune of ~USD 135 Bn.

Villages to get connected by 2018

Villages are the Backbones of India. But in this digital age, Internet services are act like blood vessels of the current world economy. People in Cities have high speed internet service which result in more education and better Economy. But People in Villages become more and more poor and uneducated. The differences are so high in this digital age. Internet divided these two worlds apart. Not only are these smart cities important for India to become super power but also villages.

India aims to bring high-speed digital connectivity to every village by 2018 and is keen to share expertise in the area with other nations, the government said. “India’s Department of Telecom, under the Universal Services Obligation (USO) fund, is working to bring high-speed broadband to every village in the country by 2018,” Telecom Secretary J.S. Deepak said at the global conference here organized by the Telecom Equipment and Services Export Promotion Council (TEPC). ”The government is working to bring the game-changing impact of technology to all our six lakh villages and the optical fibre network to all rural areas,” he added. Noting that the Indian telecom was currently the “most happening infrastructural sector in the country”, Deepak dwelt on the unique advantage of Indian products.

“Indian products offer the unique advantage of impeccable quality at affordable prices,” he said, adding these are based on the “state-of-the-art technology” and are “future proof, in that, they can be upgraded and upscaled and don’t have to be thrown away”. Pointing out that Indian products are “robust”, designed for tough climatic and dusty conditions, Deepak said that telecom manufacturing in India was characterised by the synergy between hardware and software. “Lastly, we have a fast-growing startup ecosystem, the second largest in the world,” he added. In his Union Budget presented on February 1, Finance Minister Arun Jaitley said the government would allocate Rs 10,000 crore to expand the Bharat Net project in 2017-18 for high-speed broadband. Bharat Net was rebranded from the earlier National Optic Fibre Network (NOFN) project in April 2015, and aims to cover a total of 2.5 lakh village panchayats. The Bharat Net project is funded under the USOF set up in 2012 for providing telecom services in rural areas at subsidised rates.

Overview of BharatNet

The NOFN project (now BharatNet), was initiated to provide broadband connectivity to Gram Panchayats (GPs) is now being implemented in the country. While Tthe project was approved in 2011, however the physical infrastructure roll out commenced in the latter half of 2014. The project entails connecting all 250,000 gram panchayats (GPs) via optic fiber cable (OFC). The NOFN project in its essence was aimed to lay underground incremental OFC from the Fiber Point of Interconnect (FPOI) to GP, in other words the missing link to connect GP. With the advent of the Digital India initiative in 2015, the scope of NOFN has evolved from the focus of laying just incremental underground OFC to creating a seamless backbone towards realization of Digital India. In consonance with this broad objective, NOFN was renamed BharatNet in April 2016.

Accordingly, the strategy and timeline of BharatNet was redrawn in April 2016. This modified approach entails connectivity to GPs by all media (underground OFC, overhead OFC, Radio and Satellite), Rreplacement of lossy fiber before FPOI to pave way for seamless provision of services in villages in on a non-discriminatory basis, operation and maintenance mechanism, and setting up of minimal last mile architecture to provide initial fillip to the service provision in rural areas, which can later be taken over by service providers. To help realize the vision of Digital India with the objective of providing technology enabled services to empower citizens. The Government of India revised the strategy to base the network on the principle of, to enabling service providers in the last mile on a non-discriminatory basis. The intent is to ensure a robust and scalable rural infrastructure that delivers an enriched experience. BharatNet by its size, spread and outreach is arguably one of the largest infrastructure projects implemented by the Central Government. Along with this the project also entails implementation by multiple agencies, multiple stakeholders, and service delivery to citizens, State Government, local government bodies, Central Government institutions and private sector. This imparts the dynamic nature to this project, where frequent and timely decisions are very crucial.

Accordingly, the Project’s implementation needs flexibility in decision making and execution approach, empowerment of the executing and implementing agency and effective and real-time monitoring of the project. The new approach to implement BharatNet, to address its dynamic nature and address its multiple focus on multiple facets of deployment, maintenance of rural infrastructure and service delivery has been has been addressed developed by redrawing the strategy in 2016.

Present scenariio

At present the total number of Wired Broadband Subscribers is 1.794 crore (17.94 Million)  in India. While the numbers of wired connectivity subscribers are not impressive, being optimistic is the first quality to achieve a target or conquer a business.

Wired broadband is an under-penetrated market in India, be it for demographic limitations, user requirements, expenditure or expansion constraints. Wired broadband subscribers are less when compared to wireless subscribers and population density. Though, India is one of the countries where Gigabit speeds are available to the consumers, the overall average broadband speeds and reach is less compared to those countries topping the list.

Is broadband everywhere?

No, it isn’t. According to TRAI, there is a little over one broadband line for every 100 people in India. There are 10 lines in Brazil, 20 in Russia and China, 30 in the US and 40 in South Korea. The World Bank reports that each new 10 wired broadband lines per 100 people improves per-capita GDP by ₹800,000. In China, it resulted in GDP growth of 2.14 per cent. Each broadband job creates 2.5 to 4.0 other jobs in a multiplier effect. While mobile broadband is a substitute for wired broadband and can enhance growth in low-income countries, each new 10 mobile broadband subscriptions per 100 people reduces GDP per household by 0.52 per cent.

Reliance-Jio gave the common man an addictive taste for affordable mobile broadband but it is also experimenting with wired broadband. Sam Pitroda worries that the unprecedented amount of knowledge available freely on the Internet may be locked up before Indians take advantage of it. Whether it is health assurance to 500 million low-income Indians or improving farmer incomes, a ubiquitous, reliable wired broadband infrastructure is critical.

Non-transparent industry

A non-transparent industry whose assets are on the streets without verifiable title has no property rights and cannot attract institutional capital. But local cable assets are on government property and carry critical news, sports and entertainment. The government’s national security responsibility calls for digitally documenting these assets.

Capital expenditure to upgrade from one-way cable TV to two-way broadband is required only on the local cable network. The government can facilitate the upgrade by authorising rights-of-way for cable and providing access to capital to operators, subject to two conditions: (i) operators organise as cooperatives or mergers in minimum blocks of 100,000 cabled homes in compact, geographically contiguous areas; and (ii) complete the upgrade within six months under a national cyber-security framework. The government can auction networks that don’t upgrade.

Anti-competitive practices in the broadcast television industry hinder Cable Broadband. Local cable operators own and maintain most of the fixed assets in the business, directly serve customers and bill and collect subscriptions. Broadcasters and their collection agents or “MSOs” bundle content and use proprietary set top boxes to limit local operators’ business flexibility and subscriber choice. The boxes and conditional access systems should be standardised.

Quality of Service

However, is there a corresponding improvement in the Quality of Service (QoS) parameter? Anecdotal evidence suggests otherwise, as mobile broadband subscribers continue to experience poor quality of audio/video calls (VoIP/VoLTE) and other services over the internet. Disparity between operator’s claims, in their advertisements, and the actual QoS received by consumers persists. Broadband labels, we argue, can help in addressing many of these concerns.

Consumers usually base their choice for broadband plans on the information available. Typically, it’s the price, usage limit and data speed (for example, 4G is faster than 3G, which is, in turn, faster than 2G) that operators highlight in their advertisements. However, they share little information on other parameters, which are often more relevant. For instance, a person sending/receiving emails and browsing web occasionally might priorities reliability over speed. Consumers of large amounts of music and video online value higher download speeds, while players of interactive games value upload speeds.

Unsurprisingly, consumers frequently complain about QoS for broadband services, despite subscribing to plans with attractive prices and data speeds. Complaints include data packs running out faster than expected, speeds lower than shown in ads, connections breaking often, and appreciable downtime. Despite the Telecom Regulatory Authority of India (TRAI) mandating minimum QoS benchmarks, testing measures and reporting requirements, QoS in general remain poor.

Operators may not always be at fault. Consumers may erroneously choose data plan unsuitable for their requirement. Consumers may be unaware of being subscribed to automatic software updates, which may consume large amounts of data. So can downloading videos sent by friends. Similarly, locations (like a basement) may result in poor broadband speeds. Operators also face genuine hurdles in obtaining Right of Way for installing cables and towers to improve coverage and connectivity.

Yet operators are arguably to blame on one crucial aspect, i.e. transparency. They rarely share sufficient, relevant and easily comprehendible information with consumers, which results in uninformed choice making. Also, companies rarely highlight the ‘terms and conditions’ applicable, such as a 30GB monthly plan allowing only 1GB usage per day, after which speed falls to near zero and tariff rises steeply. The speeds advertised are not practically attainable, on all devices or across all applications. Most consumers lack skills, time or even confidence to make sense of QoS or billing parameters. This is where informative labels can induce transparency, to enable consumers in making informed choices.

Most consumers are familiar with labels in other contexts. For example, the Bureau of Energy Efficiency (BEE) ‘star label’ can indicate the impact of an electrical appliance on the electricity bill. A study by CLASP—the global voice & resource for appliance energy efficiency policies—suggested that apart from price, brand, product life and technology, energy efficiency rating also influences consumer choice. The ‘nutrition label’ mandated by the Food Safety and Standards Authority of India for packaged food products is helping consumers with special dietary requirements, such as growing children, diabetics, etc. A recent research paper suggested that 86.7% of consumers read nutrition label before buying packaged food. Likewise, the Global Adult Tobacco Survey claimed that 62% of smokers thought about quitting because of the pictorial warning label on cigarette packets.

Thus, an appropriately designed label for broadband services may help consumers in selecting a plan matching their specific needs. Considering this, several telecom regulators across the globe have drafted disclosure regulations. Ofcom, the UK regulator, has suggested a ‘voluntary code of practice’ for fixed broadband users, which envisages to provide consumers realistic information at the Point of Sale and during the contract. The Info-communications Media Development Authority of Singapore specifies minimum QoS benchmarks for broadband services and mandates operators to disclose complete set of information to consumers. The US Federal Communications Commission, in 2010 and 2015, released transparency rules for operators to comply, with the latter prescribing disclosures on network performance and management practices in the form of labels.

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